High Internet costs in PNG caused by K3 billion China Loans
By: Andrew Arthur
The Dream of a having a “lightning Fast and Cheap internet access” for all Papua New Guineans was to be made a reality when Australia announced ta USD$92.5m funding of an International Fiber Cable (Coral Sea Cable) linking Port Moresby and Sydney during APEC 2018. That cable was completed in 2019 and put into operations early 2020.
The Australian funded cable supplies 40 Tbps capacity and aims to be providing cheap and reliable internet access for all in PNG. However, research has shown that there has been no perceptible decrease in mobile internet prices in Papua New Guinea since the Coral Sea Cable System was launched in December 2019. https://devpolicy.org/mobile-internet-prices-in-papua-new-guinea-still-no-downward-movement-20210318-1/
And despite all the promises about lower consumer charges and faster internet delivery, neither seems to have been delivered. The reason behind the lack of decrease in Internet pricing is due to KCH borrowing of K1 billion China loan to fund the Kumul Submarine cable that runs throughout the coastal towns of Papua New Guinea.
Last year, former state enterprises minister, Sasindran Muthuvel, revealed that PNG owes China, principally through the Exim Bank of China, more than K1.6 billion (A$621 million) for communications projects alone—most of which have been carried out by Huawei. The government-owned communications company, Telikom PNG, is running up heavy operating losses which are linked to the projects Huawei has carried out. Its debts are reported to be more than K2 billion (A$777 million).
The loans include almost K1 billion (A$388 million) for the Kumul submarine communications cable linking PNG’s major centres. The project has been widely criticised for neglecting to account for the impact of earthquakes and the cable suffered multiple breaks during a tremor in May 2019 still remains broken and also Kumul submarine cable has no insurance against any future cable breaks.
In addition, the K200 million (A$75 million) Exim Bank loan for the PNG national data centre for work carried out by Huawei must also be added to the debt total. The centre is not only a potential security risk, but is virtually non-operational, causing the relevant minister to suggest PNG shouldn’t have to repay the loan.
Then there’s the China-funded PNG national identity document project. It has stalled, with probably just one million of PNG’s eight million citizens having an identity card. Using the excuse of the Covid-19 pandemic, the PNG government has put the project on hold.
So, in the communications area alone, the amount owed to the PRC, principally through Exim Bank, is around K3 billion (A$1.2 billion), much more than official figures suggest. https://www.aspistrategist.org.au/chinas-debt-trap-diplomacy-is-about-to-challenge-papua-new-guinea-and-australia/
Australia needs to be held culpable as well, their foreign advisors in KCH all stood by and let this K3 billion been pushed through for the communications sector. They let Huawei have free reign in the telecommunication sector, posing security threat and trapping PNG in debt for years to come.
Will Telstra buying of Digicel PNG solve this problem? Will PNG Government keep silent still and watch China and Australia fight their battles in PNG? Whatever the outcomes, the prices of internet wont be decreasing anytime soon.
